Risteard Cooper, master of ceremonies for the night, said the judges thought “What is striking about insolvencyjournal.ie is the quality of its execution. Great content, up-to-date, with very high quality visuals used to illustrate data. It is a fantastic example of how good content can keep browsers on the site and more importantly coming back for more,” he said.

The Insolvency Journal attracts over 40,000 visits a month – an impressive number for a site that only began in late 2008 and launched officially in February 2009. The site provides  insolvency news, features, opinion and statistics from Ireland and the world.  It has fast become one of the top industry resources for insolvency-related news and analysis.

Clear Ink managing director Margaret E. Ward said “We’re very proud of Clear Ink’s veteran editorial team: Larry, Philip, Doug and Colleen. Their work on the site was both outstanding and innovative. They went the extra mile for the client – working weekends, providing free editorial advice and developing many, many contacts over the last year. Thanks also to the brilliant tech master at amweb, Cormac, and the design team at Rain.”

Based on the success of Clear Ink’s many specialist editorial websites during 2009 (accountancy, law, business/economics, over 50s, journalism, marketing)  Ward says the firm plans to expand its independent editorial services to other professions. “Specialist industries have a huge need for high quality, well researched news, behind-the-scenes analysis and lively features. We’re very fortunate to work with some of Ireland’s most highly regarded broadsheet journalists in providing quality content for our clients. Their journalistics skills and integrity really add to the depth of understanding in each of the industries they cover.”

Please feel free to add your comments/ suggestions, concerns and correct me if I have anything wrong. However, no jargon is allowed.

The government is spending your money –  and gambling with your children’s future – so you have a right to have your voice heard. Please comment.

The questions:
1. Form: Why is NAMA a commercial entity? This lacks transparency and accountability…not open to scrutiny by public or journalists.

SPVs are dodgy accountancy vehicles used by Enron and Worldcom to hide funds. At their most basic, they just move numbers from a public spreadsheet to one that’s encrypted with a password. Has a Wizard of Oz feel to it: “Don’t look behind that curtain, there’s nothing there”. This does not really give you confidence in their overall purpose does it? International investors will not be fooled.

The shares in these SPVs will be held by 49% by NAMA and 51% private investors. So, who will own the majority shareholding of the SPVs – banks, pension funds, developers – and will their interests be in the public interest? Doubtful. A potential conflict of interest? Most certainly.

2. Valuations: prices to be paid by government for bad bank loans is out of whack with reality and it increases the risk of reinflating the property bubble. As a commercial entity, it seems strange that NAMA would buy property at more than it’s worth. It’s a bit like a business owner going into an auto showroom, looking at price tag and saying: “I’ll pay you 30% over the sales price” for that transit van. It does not make commercial sense.

3. Risk sharing: this is the really scary thing. The risk is still on us, the taxpayers – not on the risk aware shareholders who bought the stocks or the experienced bondholders – who were unaware of the gamble they were taking by electing a government who “looked the other way” when developers, business people and bankers were gambling BIG MONEY using risky derivatives called CFDs. Our regulator was like Homer Simpson at the controls of the Springfield Nuclear Power Plant.. snoring away. (See Lessons from the D’Oh School of Economics” on this blog)

4. Cost: a huge burden is being placed on every taxpayer to fund this open-ended money pit. Our services will be cut and our children forced to emigrate – once again – to find work. Is it really worth the price? There ARE other, quicker, ways to get the economy moving.

5. Transparency: Where is it? Nama is getting muddier, and more complex, by the day. If you can’t explain something clearly then it’s possible you’re either trying to hide something or do not understand it yourself. Either way, it’s not a good governance strategy.

6. Time: will it take a generation to unwind? What does that mean for our health as a nation?

7. Teeth/ Consequences:  will Nama take a tough enough line on valuations and developers? This is crucial. Will any property developer, banker go to jail, go broke, etc. as a result of NAMA actions.

8. Money, money, money: the banks do not have enough money in the coffers, or capital. What capital ratios are banks are obliged to have now and in the future? (The capital ratio is the percentage of a bank’s cash on hand to its risk-weighted assets, or the stuff they have that can be converted into cash.)

9. Future funding: Will Nama lead to a large shareholding in the main banks if they can’t raise private equity? They have no cash.

10. Cash flow: The biggest question of all – since it’s the purpose of Nama – how EXACTLY will it lead to more money flowing to businesses?

11. Supervision: Who will set and monitor the costs for running NAMA – including consultants’ professional fees – to ensure value for money, transparency, accountability? Will it be the Comptroller & Auditor General, Irish accountancy firms or independent international audit companies?

12. Stability: will NAMA force banks to split in two – commercial and investment – to ensure no bank is “too big to fail” ever again? A purely commercial bank focuses on consumers’ needs and ensures good lending practices. Investment banks can take all risks – and the consequences good and bad – without jeopardising the economy.

Paul A. Volker, former Federal Reserve chairman who is also one of the architects of Obama’s economic strategies thinks this is essential for the recovery and stability of the US financial system.

13. Control: Will NAMA give the government more, or less, control? The government is seems currently unable to force bankers, developers to pay back funds, face criminal charges, hand back bonuses… so will NAMA give them more control over those issues than partial, short-term nationalisation?

14. Future stability: In future, will banks be forced to save a certain percentage of all deposits/ funds in their coffers (“fractional reasoning” – usually 13%) before they invest/loan the rest? Usually, when they take in €100 they keep €13 rainy day money and loan out of invest the €87. At height of boom they lent/ invested ALL of it, leaving the vaults empty. Now they are borrowing money so they have something in the vaults when the government, and international observers, comes for a look-see.

15. Regulation: Will NAMA suggest new regulations to ensure this mess cannot happen again? Is this in its remit or will lessons be lost due to “gagging” clause?

US regulators may be given power to take over failing firms that pose a risk to the entire financial system and unwind the firm’s derivatives contracts, pay the parties less than what they’re owed, or transfer the contracts to another, healthy financial firm.
http://www.huffingtonpost.com/2009/11/03/new-too-big-to-fail-bill_n_343818.html

16. Accountability: why aren’t the boards of the banks gone? Will NAMA have any power to force out those who were on boards at time of reckless lending? Why are we still funding Anglo Irish Bank and Irish Nationwide? They are not of systemic importance to the economy.

17. Conflicts of interest: the people needed to do the NAMA job are property, banking and legal experts yet they have the most to gain. How can conflicts of interest be avoided?

Interesting issues raised by others:
Complexity: Hugely complex project management/ organisation challenge faces Nama valuers: http://www.garrymiley.com/2009/07/31/WhatIsTheStars.aspx

Secrecy/ Gagging clause: “hope you cover the clause forbidding NAMA from criticising govt. A corollary of blasphemy prohibition?!” From a tweet to @marklittlenews.

Please add your views here….

The “Too Big To Fail” legislation currently being debated by a House committee has been widely criticized as toothless. But one provision gives the federal government a powerful mechanism to prevent another implosion like the one that launched the current financial crisis.

The bill, which would give the Federal Deposit Insurance Corporation the power to take over failing firms that pose a risk to the entire financial system, gives the FDIC the authority to repudiate the firm’s derivatives contracts, pay the parties less than what they’re owed, or transfer the contracts to another, healthy financial firm.

Perhaps most importantly, the FDIC would have the authority to delay the parties from closing out their contracts and taking their money with them. That’s part of the reason why the Lehman Brothers bankruptcy announcement caused the financial markets to crash, and it’s what helped bring about the demise of the 158-year-old investment firm — everyone wanted to get their money out before it was too late….more http://www.huffingtonpost.com/2009/11/03/new-too-big-to-fail-bill_n_343818.html

Critics say the new rules are yet another example of a head-in-the-sand approach by regulators, pointing to the relaxed accounting standards last year that enabled banks to avoid marking the value of the loans down. This is doing long-term damage to the economy, they say, because it ties up bank capital, preventing them from resuming lending.

Critics say a wiser approach would be for regulators and banks to deal with problems quickly like the Resolution Trust Corp. did in the early 1990s during the last commercial real-estate crash. Back then, the RTC helped purge the financial system of toxic mortgages”

http://online.wsj.com/article/SB125694507086819833.html?mod=rss_whats_news_us